November 28, 2012

Twinkies & Big Macs: Thinking Sociologically About Black Friday

By Jonathan Wynn

There were Black Friday protests at my local WalMart in Western Massachusetts, organized
by unions and worker’s rights advocates. If you watched the news you may have seen
one in your town too. Protesters object to the fact that the company offers
low-pay, limited-benefit jobs while the Walton family holds as much wealth as
the bottom third of the U.S. population. This follows reports from Hostess
(makers of Twinkies), claiming a worker’s strike gave them little choice but to
shut down production, and liquidation seems eminent. Hostess feels the pinch from owing over a billion
dollars to creditors, including their workers’ pensions but also to hedge
funds (like Silver Point Capital) that own 30% of the company’s debt).

Of course, you can still buy
Twinkies at WalMart.
While some lament the potential loss of the yellowcake confection (according to
a book on Twinkies, some of the ingredients are "more closely linked to rocks
and petroleum than any of the four food groups," and the primary sweetener
is high-fructose corn syrup), we don’t talk too much about the working
conditions of the folks that make them. Liquidation of Hostess would not only
eliminate jobs but worker’s pension plans as well, even though workers already made significant
concessions and the CEO pocketed a 300% increase in his
compensation package.

While watching the news, I
thought about those Hostess and WalMart workers, but I also wondered about workers
in other countries. We can better understand the conditions of workers in a
comparative context through another iconic American food: The Big Mac. How?

I’ll add that one of my
oldest and dearest friends balked at a Facebook post I made about WalMart,
stating that he was “stunned” that I would be against a company where
stockholders only take 3 cents net profit on every $1 they sell. (Can you tell
he’s an investment banker?) We had an intense back-and-forth. I wrote about
wealth, the Gini Coefficient (which measures income inequality across nations,
and places the
U.S. on par with China), and
human development indexes (accounting for factors like birth rates, literacy, and
long-term unemployment). I wrote how, when incomes grow on average, those benefits are not necessarily shared equitably, and how the average CEO pay grew
380 times more than average worker pay. He wrote about shareholders, profits, and that
capitalism raises people out of poverty around the world.

And what about that global
scope? David Redmon made a great documentary about the Global Assembly Line
called Mardi Gras:
Made In China. (It has
been part of the You May Ask
Yourself set of Sociology in
Practice film clips on the StudySpace). Redmon looks at a seemingly superfluous
object—the Mardi Gras necklace—and follows it from the bacchanalia of New
Orleans to Tai Kuen Bead Factory
in rural Fujian Province, China. (In the
same fashion, a wonderful book, Travels of a
T-Shirt in the Global Economy,
tracks the “biography” of a t-shirt across the globe, and a video lecture by
the author is available here.)

Redmon interviews both
workers in China and revelers in New Orleans and brings images and experiences
from both ends of the global production chain in contact with each other. When
shown images of manufacturing workers, most Mardi Gras folks watch in horror as
they see young women working in sweatshop conditions. But one MBA student is
interviewed and says, ”It
doesn't matter, ten cents there is a lot of money.” In class conversation someone will usually echo this sentiment,
albeit less callously, saying that the dollar amount is not the same across
different socio-economic contexts. This is true. But how much of a difference?

This is where the Big Mac
comes back. One of the tricks I use to compare the purchasing power of an hour
of labor across different geographic and economic regions is called the ”Big
Mac Index.” According to The Economist, this is created:

…based on the theory of
purchasing-power parity (PPP), which says that exchange rates should move to
make the price of a basket of goods the same in each country. Our basket
contains just a single item, a Big Mac hamburger, but one that is sold around
the world.

In other words, the Big
Mac is made the same way in all 119 countries McDonald’s is located in, right?
It’s the same object (almost),
being made and sold in the same way whether it is in Buenos Aires or Yuyuan
Garden in Shanghai or Buffalo, New York. So, we can compare work to purchasing
power around the same unit of measurement. Here is some comparative
data, from a recent Economist article:

This chart shows that in
countries like Germany and France, a worker can buy 2.2 Big Macs for every hour
working at McDonald’s, while a worker in India would need to work five and a
half hours to buy the same amount of burger.
This, in the eyes of The
Economist, is the way that you can better understand purchasing power
across countries.

If Marx were alive today he
would be horrified (but unsurprised) that folks would spend their day off from
work eager to give back their hard earned profits back to billion dollar
corporations, even as workers protest
outside. (I’ll follow up on the consumerism side of the shopping season in my next
blog post about crowds.) But thinking critically about labor conditions and the
supply chain a la Redmon’s film is a great start.

Getting back to labor
conditions in the U.S., there is a lot to be thankful for. Workers at Hostess
and WalMart likely have better purchasing power than those in other countries.
But is that a satisfying enough measure for you? What do you think these
workers should do?